Amazon Q4 sales go through the canopy

But will shoppers side with more familiar brands?

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Amazon.com yesterday reported sales for last year rose by a staggering 313 per cent -- up from $147.8 million in 1997 to $610 million in 1998 -- but reported an operating loss of $74.4 million, even further into the red than the $31 million the company reported the year before. Much of that gain was down to an impressive fourth quarter which saw sales increase to $252.9 million -- an increase of 283 per cent on the same time last year. However, that's not too surprising given the seasonal increase in sales and Amazon's moves to expand into video and gift sales. The relatively high loss this year -- given how much more money it actually made in sales -- is largely the result of acquisitions, such as the companies that became Amazon's UK and German subsidiaries. Amazon also said that its UK division had performed well but failed to give any details. An Amazon.co.uk spokesman said that the company didn't want to publish any sensitive information that might somehow be damaging. Instead it said that combined sales in the UK and Germany nearly quadrupled over the third quarter last year. UK stationer WH Smith -- which has recently announced major plans to develop its online business -- reported its Internet sales of books rose by 70 per cent to £1.7 million since 1 September last year. And the well-known UK bookstore chain Waterstone's -- one of the very first e-commerce sites in UK -- said it was selling books to people in more than 70 countries, and that orders were growing by 30 per cent a month. Amazon.com continues to stake its claim as the world's -- and the UK's -- leading online bookstore, yet it may find its position squeezed by more established brands. Amazon CEO Jeff Bezos said 1999 would see the company build a "significant distribution infrastructure", suggesting that while the company's revenues will continue grow, it remains likely the company will continue to show a loss. ®